Inheritance Agreements (Mutual Wills)

Who should use an Inheritance Agreement?

An inheritance agreement is usually prepared at the time spouses write their Wills in which they provide for each other if they are alive, and then to their respective beneficiaries. This is therefore useful as it offers some peace of mind that your spouse will be legally obligated to follow the terms of this inheritance agreement after you have passed away, even if years pass between your death and then your spouse’s subsequent death. This type of agreement should not be entered into lightly as it does restrict the rights of the surviving spouse. However, this agreement does have plenty of advantages as well and are particularly common with estate planning for blended families and/or families with stepchildren or other eligible beneficiaries.

How do inheritance agreements work?

With an inheritance agreement you and your spouse agree upon an amount that the survivor of you will leave to your beneficiaries (whether that is children of your union, or various step-children). This legally-binding agreement places restrictions on the surviving spouse from fully changing their Will after the death of the first of them, and leaving it all to someone else (ie. Leaving it to a new partner or a carer, rather than to the children). There are also restrictions on the surviving spouse from making lifetime gifts to third parties instead of to the originally agreed beneficiaries.

Without an inheritance agreement, a surviving spouse could re-partner and change their Will to benefit this new spouse, or they could decide to benefit their own children and to disinherit their step-children. They could even benefit a carer and/or a charity if they wanted to. An inheritance agreement helps alleviate this risk by putting a legally binding mutual will contract in place between the spouses at the time of preparing their Wills which details the promises they are making to each other once one of them passes away.

Do you need a mutual Will if you already have a mirror Will?

A mirror Will is not the same thing as a mutual Will. Commonly, a mirror Will is just a colloquial term which refers to when spouses create identical Wills but there is no binding contract to ensure that it doesn’t substantially change after the death of the first of them. In this case, you and your spouse expect the other person to adhere to the details set out in this Will.

However, this isn’t always what happens. Sentiments may change over time. With a mirror Will, whoever is the surviving spouse can change their wishes and prepare a new Will. If you want both you and your spouse to be legally obligated to honour your original sentiments around your estate and to limit the possibility of this changing after one of you pass away, then talk to your estate planning lawyer about the option of creating an Inheritance Agreement.

At Estate First Lawyers, we offer Inheritance Agreement preparation services. As experienced estate planning and administration lawyers, we understand how important it is to ensure your Will and other documents are written in a way that aligns with your wishes and that your family will be cared for. Contact us today.